Amid fresh evidence that governments are seeking to boost their own economies' growth by manipulating their exchange rates, Pascal Lamy expressed concern that the next step would be the erection of tariff barriers.

"We have been living with this for two years," the director general of the World Trade Organisation told the Guardian on a visit to London to meet government ministers. "The question is whether this [the anti-protectionist mood] is stable or risks being dented by currency developments. There is a risk and the risk is not nil."

Lamy said: "What should be avoided is a domino effect, where you get a beggar-my-neighbour, or tit-for-tat, chain and it sours and sours."

He added that the existence of the WTO, the fear of a return to the experience of the 1930s and the increasingly integrated nature of global trade had so far deterred governments from raising barriers to imports, but warned that the reluctance to use protectionist measures was now being tested. A currency war and protectionism were the only two problems the global economy had not faced during the crisis of the past three years, Lamy said.

Markets are anxiously awaiting the release tomorrow of the US treasury's half-yearly report to Congress on whether any country has been "manipulating" its currency against the US dollar. Despite strained relations between Washington and Beijing, the US treasury has so far avoided branding China a currency manipulator – a move that would see an escalation in what some policymakers have already dubbed a "currency war".

Chris Turner, an economist at ING, said: "We believe the White House will still prefer to keep lines of communication open with Beijing, and China will not be named. Were China to be named, US asset markets could come under heavy pressure on fear of a trade war."

Figures released in Washington today showed the US trade deficit with China reaching a fresh record of $28bn (£18bn) in August, up from $25.2bn the previous month, while the overall trade gap widened from $42.6bn to $46.3bn.

Paul Dales, a US economist with Capital Economics, said: "The widening in the international trade deficit, and in particular the jump in the bilateral deficit with China to a record high, will only fuel growing speculation of a currency war."

Lamy saw for himself the signs of growing stress in the international currency system when he attended last week's meeting of the International Monetary Fund in Washington. He said there were different ways in which countries were manipulating their currencies. Japan and South Korea were intervening directly; Brazil had used controls on capital inflows; Britain and the US were thinking of pumping more money into their economies .

In the 1930s, countries used both devaluation and tariffs to insulate themselves from the impact of the Great Depression. The collapse of the gold standard allowed nations to seek an edge through cheaper exports, which led to retaliation both in the currency markets and through the erection of tariff barriers.

The General Agreement on Tariffs and Trade was signed after the second world war and Lamy said the WTO was studying the Gatt rules to see if they could be used to prevent a new wave of protectionism.

Lamy's comments came as a fresh spat emerged between two of the most important exporting nations in Asia – Japan and South Korea. Tokyo complained about the currency policies being pursued by its neighbour, only to be rebuffed by Seoul.